Fallout of the Iranian N-deal

Global diplomacy has become hectic so as to prevent a full-blown crisis in an already volatile part of the world — the Middle East — as US President Donald Trump announced his decision on the Joint Comprehensive Plan of Action (JCPOA) better known as the US’s nuclear deal with Iran. Earlier, Trump, who had threatened that the US would ‘withdraw’ from the deal on May 12 — the end of a 120-day review period — unless the Congress and European powers fixed its ‘disastrous flaws’, tweeted on Tuesday, “I will be announcing my decision on the Iran Deal tomorrow from the White House at 2 pm.”

The fact that Trump had been wanting to opt out of the Iran nuclear deal for some time now was no secret. In the run-up to his announcement, Europe had done its best to persuade Trump to stay on. Trying to convince Trump about the desirability of continuing with the Iranian deal, British Foreign Secretary Boris Johnson had argued that ‘the United States and United Kingdom diplomats have been working alongside their French and German counterparts to reach a joint approach towards Iran, focused on countering Tehran’s regional meddling, reducing its missile threat, and ensuring that it can never build a nuclear weapon’. He added that he was convinced that ‘every available alternative is worse’.

Johnson’s statement came days after French President Emmanuel Macron and German Chancellor Angela Merkel paid visits to the US to try and save the nuclear pact with Iran.

Despite Europe’s entreaties, Trump had remained unconvinced, terming the pact ‘insane’. His criticism largely revolved around the fact that the current deal only limited Iran’s nuclear activities for a fixed period and did not stop the development of ballistic missiles. He was not alone in his belief. Last week, Israel upped the ante against the deal by revealing ‘secret nuclear files’ which it said showed Iran had run a clandestine nuclear weapons programme before 2003 and had secretly retained the technological know-how, in breach of the agreement. Israeli Prime Minister Benjamin Netanyahu had accused Iran of supplying advanced weapons to the Syrian government that posed a danger to Israel.

Meanwhile, Iran has also hardened its position with Iranian President Hassan Rouhani warning Trump of ‘historic regret’ if the US were to scrap the nuclear agreement with Tehran. Iranian critics of the JCPOA have also pointed out that the US was continuing to squeeze Iran, as financial sanctions and threats of billions of dollars in penalties against banks that dared to do business with Iranian companies or citizens remain in place. The growing resentment against the worsening economic climate, thanks to the sanctions, have put the Rouhani government on the back foot, generated a popular backlash, and emboldened the hard-line and conservative faction within the regime.

While Iran branded Netanyahu’s claim regarding the Iranian nuclear programme a ‘lie’ and said the documents that he produced were a rehash of old allegations already dealt with by the International Atomic Energy Agency (IAEA), the US domestic environment was slowly turning against Tehran. US Secretary of State Mike Pompeo suggested that documents produced by the Israeli Prime Minister were ‘authentic’ and showed the 2015 Iran nuclear deal was ‘built on lies’. The arrival of John Bolton as National Security Adviser (NSA) also meant that the policy of ‘regime change’ was firmly back on the table.

The impact of Trump’s decision on JCPOA will be felt as much in New Delhi as in the rest of the world. India is the third biggest consumer of oil in the world, with Iran being India’s third largest oil supplier in 2017. If Trump decides to renege on the JCPOA, then India will come under pressure to drastically reduce its reliance on Iranian oil once again, much like the pressure it faced in the pre-JCPOA period. The signing of the nuclear pact has also helped India in pushing the strategic Chabahar project in southeastern Iran on the Gulf of Oman, which is Iran’s only ocean port, and a hub of trade with Russia and Europe, on a faster track.

Post JCPOA, there is also the spectre of China entering Iran even more aggressively, a move that would haunt India and ensure its choices would get even more restricted. Increased pressure on New Delhi to downgrade its ties with Tehran would not only impact Chabahar’s future and bilateral trade but also derail India’s carefully calibrated West Asian diplomacy. The Modi government has so far been successful in enhancing its ties with Iran, Israel, and the Arab Gulf states simultaneously, partly because the Iranian nuclear deal has eased tensions between the West and Iran.

There have been tensions between Iran and India for sure in recent months. For example, over Iran’s decision to award its Farzad-B oilfield to Russian company Gazprom and periodic hints that China and Pakistan would be invited to participate in Chabahar. But by and large, a sense of normalcy has returned to Indo-Iranian relations, which is now being threatened by the Trump administration’s penchant for disruption. Though India has taken some actions to shield itself from potential costs such as allowing Indian companies to invest in Iran in rupees, thereby safeguarding Indian projects in Iran, the costs can potentially be much higher than anticipated. Therefore, during Rouhani’s visit to India earlier this year, India had ‘reaffirmed its support for full and effective implementation of the Joint Comprehensive Plan of Action (JCPOA), which has been endorsed by the UN Security Council and is a ‘crucial contribution to the non-proliferation framework and international peace, stability and security.’

New Delhi will be hoping that European powers will keep supporting the deal despite Trump’s opposition so that the impact on India will also be manageable. But hope is a precious commodity in these volatile times.

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Professor Harsh V Pant is a Distinguished Fellow and Head of ORF’s Strategic Studies programme. He holds a joint appointment with the Department of Defence Studies and King's India Institute as Professor of International Relations. He is also a Non-Resident Fellow with the Wadhwani Chair >>